of HP's founders may delay the proposed HP-Compaq deal or--because timing has always been critical to the deal--even kill it altogether. Gartner believes senior management will likely be
seriously distracted by the need to convince other investors to go along with the merger. Management inattention always poses a serious problem, but now with the economy in recession and with both businesses and consumers cutting
back sharply on their IT purchases, all vendors should focus on revenue generation and survival.

The need to win over investors, especially sophisticated institutional investors, may also force HP and Compaq to reveal more details of their business operations. This may highlight the supposed synergies between the
two companies, but it will also likely expose areas of weakness in their business models and expose them to targeted tactics by their competitors.
For this reason, the merger-related problems give HP-Compaq's competitors a significant opportunity to gain market share at the two companies' expense.

Until these problems have been resolved, businesses should approach HP and Compaq products with caution. These products remain safe bets from a tactical standpoint--that is, for initiatives that are either
short-term or not mission-critical--as do upgrades to installed products. The problems surrounding the merger will likely also leave the two
companies' service and support operations unaffected.

However, long-term strategic commitments to HP and Compaq products carry significantly more risk. Businesses should limit these commitments to
product lines that Gartner has already identified as strategically sound:

Businesses can also invest with confidence in PCs and personal digital assistants from either vendor because of minor technical differentiation and
rapid product cycles, respectively.

There is a bright spot for HP-Compaq buyers in all this,
however. Competitive pressure and the determination of both companies to
meet their announced financial targets will make HP and Compaq significantly
more open to negotiation. Purchasers should seize this opportunity and turn it to their advantage.

(For related commentary on the strategy and implications of the HP-Compaq merger, see Gartner.com.)